Agent attitudes, rate reasoning & daunting debt

12-14-2018

SLIGHTLY SLOWER

Homes are staying on the market a tad longer according to the National Association of Realtors (NAR). NAR’s Realtor Confidence Index Survey shows that listings were on the market for an average of 33 days in October, up from 29 days the previous month. Responding Realtors® cited “interest rate” and “low inventory” as the major issues affecting transactions in October.

HIKE HIATUS

Though mortgage interest rates have trended upward most of this year, recent stock market volatility has presented prospective home buyers with an early holiday gift. Rates for a 30-year fixed rate mortgage receded .06% for the week ending December 6 according to Freddie Mac’s Primary Mortgage Market Survey (PMMS). The PMMS has tracked U.S. mortgage interest rates since 1971.

RATE REMINDER

The Federal Reserve is fulfilling expectations and will likely raise rates again when the Board of Governors meets next week, but that doesn’t mean mortgage interest rates will follow suit. Freddie Mac Chief Economist Sam Khater reminds the public that the Fed funds rate and other oft-mentioned indicators such as the stock market aren’t the true drivers of mortgage rate activity, saying, “When stock prices drop, it causes a flight to safety and Treasury bonds. In the short term, this is good for consumers.” The next meeting of the Federal Reserve Board was rescheduled from December 5 due to the declaration of a national day of mourning for former president George H.W. Bush.

AVERAGE OWED

NerdWallet released its 2018 American Household Credit Card Debt Study and it shows big numbers. U.S. consumers with mortgages owe an average of $184,417 nationwide. Average student loan debt is $47,671, while Americans with credit card debt carry an average balance of $6,929.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

A tempered trend, possible peak & affordable add-ons

12-7-2018

UP AGAIN

Home appreciation is up again, gaining 5.4% year-over-year in October according to the latest CoreLogic Home Price Insights (HPI). Prices were also up .5% month-over-month, but CoreLogic forecasts the November numbers will show negative gains. Despite higher mortgage rates and declining affordability, CoreLogic Chief Economist Frank Nothaft says, “Many renters view a home purchase as a way to build wealth through home-equity growth.”

STAYING STEADY

Freddie Mac reported a zero-percent change in rates for the 30-year fixed rate mortgage in its Primary Mortgage Market Survey for the week ending November 29. Recent trends show rates stabilizing as a result of trade concerns and weakening indicators in the auto and new home segments of the economy. The number of mortgage applications rose for the second consecutive week as a result, according to the Mortgage Bankers Association.

COSTLY CREDIT

Late credit card payments will cost more in 2019. Rates for first-time and subsequent tardy payments will rise $1 each next year to $39 and $28, respectively. The Credit Card Accountability Responsibility and Disclosure Act of 2009 – also known as the Credit CARD Act – permits watchdog agency Consumer Financial Protection Bureau to adjust ceilings for late fees on an annual basis.

SENIOR HOUSING?

In an attempt to address its worsening housing affordability crisis, Denver is “thinking outside the zoning box.” Government-sponsored entity Fannie Mae will fund a pilot program in the city that will permit property owners to install and rent out Auxiliary Dwelling Units (ADUs) to create more housing options, revenue streams for low-income homeowners and combat skyrocketing rents. ADUs are also known as “mother-in-law suites” or “granny flats.”

 

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Peak perspective, rate retreat & leapin’ limits

11-30-2018

ABOVE & BELOW

The latest Real House Price Index (RHPI) from First American Financial Corporation shows some interesting ups and downs. Though home prices are up 15.3% year-over-year from August 2018, First American says U.S. home prices average 37% below the 2006 pre-recession peak. First American Chief Economist Mark Fleming puts the numbers in perspective, saying, “Without stronger household income growth, rising mortgage rates will continue to impede consumer house-buying power, reducing affordability.” The RHPI uses incomes and mortgage rates to inflate or deflate unadjusted house prices to capture the true cost of housing.

RATE ROLLBACK

Mortgage interest rates trended downward in the week ending November 22 according to Freddie Mac. The Primary Mortgage Market Survey (PMMS) reported the largest weekly drop since January 2015. Freddie Mac has tracked mortgage rate data since 1971.

NEW NORMS

The Federal Housing Finance Agency (FHFA) announced the third increase in conforming loan limits in three years this week in compliance with the Housing and Economic Recovery Act (HERA). HERA requires annual adjustment of baseline conforming loan limits for Fannie Mae and Freddie Mac to reflect changes in home prices. In most of the U.S., the 2019 maximum conforming loan limit for one-unit properties will be $484,350, an increase from $453,100 in 2018.

BUMMED BUILDERS

This year finds builder confidence is at its lowest level since 8/16, while housing starts and building permits were highest in January and March, respectively. The most recent peaks for existing and pending home sales occurred in 11/17 and 4/16. Prices are rising noticeably slower, inventories are increasing, and affordability is near a decade low, according to economist Elliot Eisenberg, PhD. However, with solid household formation, incomes up and job growth holding strong, Eisenberg predicts, “Housing won’t cause the next recession. It’ll be something else.”

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Winter Warmup: 5 ways to soothe seasonal stressors

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FIVE WAYS TO SOOTHE SEASONAL STRESSORS
For many of us, winter means plummeting temps and navigating ice and sleet on the daily commute. But even if frozen roads and falling snow aren’t part of your picture, this time of year still has its own set of unique (and often stressful) challenges.

Try these tips to let go of the strains of the season and help yourself chill out this winter.

 image1 Ease your energy expenses

Dropping degrees don’t have to signal a rise in your heating bill.Changing air filters regularly (every 60-90 days) is an easy way to cut energy costs. Install a timer on your water heater to switch it off at night and back on just before you wake up in the morning. Turn your thermostat down a few degrees and put on a favorite sweatshirt or sweater to stay cozy.

Eliminate pest unrest

Humans aren’t the only ones who want to come inside to stay warmand have a bite to eat when it’s cold outside. Prevent mice from becoming holiday houseguests by keeping entry and garage doors closed, and putting all pantry and pet food in sealed containers. Keep crickets out of the house by sealing any gaps around doors or windows, and make sure the foundation and perimeter of your home is free of the grass, weeds and mulch they love to hide in.

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 image3 Savor the sun

The lack of sunlight that comes with shorter days can make it tough to invoke a cheerful mood. Make the most of the daylight hours that you do have by going for a walk on your lunch break.Skip the gym and try an outdoor workout. When the sun goes down, light candles throughout your house to create a calm, uplifting atmosphere.

Honor your health

Spending more time indoors with other people, coupled with colder, dryer air can help illness-causing viruses to spread more rapidly. Give your immune system a boost by drinking plenty of clean water(add a squeeze of lemon or other citrus for extra vitamin C) and getting 7-8 hours of sleep a night. Consider taking a gut-friendly probiotic, or adding more fermented foods such as raw sauerkraut and yogurt to your diet.

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 image5 Protect your pets

If it’s too cold for you to be outside for long periods, it’s too cold for your pet, as well. Limit their exposure to the elements, and dress shorthaired dogs in coats or sweaters that cover them all the way to the belly. Invest in some comfy cat and dog beds to give your furry family members some extra wintertime warmth.

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

Simple Tips for a Seasonal Spruce Up

 

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As the heat of summer mellows into the chill of fall, it’s natural to want a change of design to match the shifting seasons. Warmer colors, spicier scents and richer textures all combine to turn your home’s interior into an inviting autumn retreat. But what about the exterior? The outside of your abode sets the tone for visitors. And whether you live in an apartment or a single-family home, there are plentiful ways to make a fantastic first impression.
Here are a few easy ideas to jump-start your creative juices:
image4 Blissful Balconies

Whether you use it to sip tea and read or visit with friends, your balcony is an ideal spot for a special seasonal sanctuary. If space is limited, create a comfy nook with furniture like garden stools that can double as a seat or table. Fill a small basket with fall decorations (acorns, leaves, apples, etc.) and place it on an end table or balcony railing for added fall cheer.

Create Coziness

As the temperatures cool, make your outdoor space warm and inviting. Add soft pillows and fuzzy throw blankets made of knitted wool or faux fur to your patio chairs and couches. Use decorative candles and lanterns for a soft glow. Diffuse essential oils in traditional fall scents like cinnamon or clove for added relaxation.

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 image6 Chalk It Up

Chalkboard signs aren’t just for java joints and diners. They’re actually a fun and easy way to punch up your porch appeal. Choose a board that can hang on your front door or stand alone as an easel. Grab a collection of colored chalk and design a greeting of your choice. Leave space on the board for friends and family to add their own good wishes or artistic expressions.

Great Gourds

Pumpkins may get the most press this time of year, but there are other members of the gourd family that deserve some attention, too. Fill pottery bowls with acorn or turban squash in colors that range from bright green and orange to white. Gather fresh wildflowers in rustic vases and intersperse them with different sizes of gourds in a cascading fashion down your front steps.

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image8 Distinctive Doormats

The humble doormat may not seem like a key design element, but the right one can add a dash of style to your entryway. Try swapping out the traditional fibrous mats for ones made of fancy faux iron or colorful rubber or vinyl. Personalize them with your own heartfelt or humorous welcome message.

Try out a few of these easy embellishments to make your outdoors truly great

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

 

Price predictions, Millennial mentality and what’s the world worth?

PRICE “BRAKE”

The September Home Price Insights (HPI) from CoreLogic says U.S. home prices rose .4% between August and September and 5.6% year-over-year. The HPI is not forecasting a price decline; however, the report predicts prices will grow slower from September to October at .6% below the previous month’s gain rate.

UP AGAIN

Mortgage interest rates rose to levels not seen since 2011 according to Freddie Mac’s Primary Mortgage Market Survey. Rates for the 30-year fixed rate mortgage rose .11 week-over-week and 1.04 year-over-year in the week ending November 7.

AFFORDABILITY OBSTACLE

Millennials are interested in homeownership, but the vast majority of that demographic views affordability as the biggest hurdle. A 2018 study by RTi Research found that 40% of Millennials are interested in buying a home now and 64% regularly monitor home prices in their area. The study noted that while 80% of Millennials plan to move within four to five years, 73% cited affordability as the biggest obstacle to buying a home. CoreLogic CEO Frank Martell confirmed RTi’s findings, saying, “Our consumer research indicates younger Millennials want to purchase homes, but the majority consider affordability a key obstacle. Less than half [of them] who are currently renting feel confident they will qualify for a mortgage.”

WORLD WORTH

Real estate could replace tea as a hyperbolic favorite to describe great value. Though there’s no established price tag for “all the tea in China,” Savills World Research found that the total value of all commercial and residential real estate in the world is $280.6 trillion dollars. Savills also found that 44% of global residential real estate value is owned by 17% of the world’s population.

Interesting indicators, owner increase & “bubble, schmubble”

HEALTHY HOUSING

The National Association of Realtors (NAR) predicts that the number of home sales will increase next year, but the rate of price appreciation will slow. Speaking at the 2018 Realtors® Conference & Expo, NAR Chief Economist Lawrence Yun rejected speculation about another housing bubble, saying “…people are living within their means and not purchasing homes they cannot afford. This is a stronger, more stable market compared to the loosely regulated market leading up to the bust.”

INTERPRETING INTEREST

Mortgage interest rates receded slightly in the week ending November 1 according to Freddie Mac’s Primary Mortgage Market Survey. Even though the 30-year fixed rate mortgage has been rising all year, the government-sponsored entity says, “…the chronic lack of entry-level supply is a larger hurdle than higher mortgage rates because choices are limited and the inventory shortage has caused home prices to rise well above fundamentals.”

SEPTEMBER SLUMP

September new home sales were down 13.2% year-over-year, following downward revisions for sales in June, July and August. Economist Elliot Eisenberg, PhD says it’s not necessarily a sinister stat, noting that “…housing sales need to consistently fall about 20% Y-o-Y before a recession follows.”

OWNER UPTICK

Homeownership is up according to the Census Bureau. The U.S. homeownership rate reached 64.4% in the third quarter, up from 64.3% in Q2 and 63.9% year-over-year.

Lower highs, shopping stats and nicest neighbors

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Whether it’s curb appeal or a custom kitchen, no two people have the same exact idea about what makes a home ideal. But most everyone can agree that having great neighbors is a good thing. With holiday spirit in the air, it’s the perfect time to connect with those around you…especially the people who live close by.

A good way to gain great neighbors is to be one yourself – today and all year long.

Here are some excellent ways to reach out and build lasting bonds:
image4 Keep it Clean

Want instant brownie points on your neighborly score card? Keep your property tidy. Hide your trash receptacles in the side yard or garage. Rake the leaves and clean up grass clippings. Give your house a periodic pressure wash and fresh coat of paint.

Straight Talk

“Good fences make good neighbors” is a popular sentiment for a reason: boundaries must be respected. But there are times when frank communication is equally important. In spite of any initial awkwardness, inviting honest dialogue creates trust in the long run. Address shared interests like worn out fences and overgrown trees on the property line before they get out of control and work out a plan that keeps both parties happy.

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 image6 Welcome Wagon

In our tech-savvy, online-obsessed world, it’s easy to forget that nothing replaces the old-fashioned personal touch. Whether they’ve just moved in, or you’ve simply fallen out of touch, a delivery of baked goods or a homemade dish is a great way to break the ice with your neighbors. Or invite them to a casual dinner or backyard barbeque at your place. Your kindness will be remembered and likely reciprocated!

Swap Digits

Sharing contact info with your neighbors is a great way to foster a sense of community and camaraderie. Whether it’s picking up a package from your doorstep or watching your home while you’re on vacation, it’s comforting to know your next-door compadre has your back. Offer your phone number and email first and ask if they’re comfortable sharing the same.

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image8 Helping Hands

Instead of waiting until they ask for help, make an effort to anticipate the needs of your neighbors. If they’ve got children and you like to babysit, tell them up front that you’re willing to watch the little ones. Offer to help with lawn care or a gardening project (which beautifies the neighborhood as a whole – win-win!).

 

ASSORTED SENTIMENTS

Consumer confidence in the housing market slipped slightly according to the latest Fannie Mae Home Purchase Sentiment Index (HPSI). Fannie Mae’s Chief Economist Doug Duncan says, “HPSI remains flat this month as perceptions of high home prices and expectations for rising mortgage rates continue to weigh on potential homebuyers. In September, the average 30-year fixed mortgage rate increased for the second consecutive month to its highest level since May 2011.” Even though the net share of Americans who said it’s a good time to sell remained the same, the number who said it’s a good time to buy rose by 5%.

SMALL STALL

Mortgage interest rates mellowed out after several weeks of rapid increases. The U.S. weekly average for the 30-year fixed rate mortgage dropped .05 for the week ending October 18 according to Freddie Mac’s Primary Mortgage Market Survey.

SOUPED-UP SCORES

A new scoring method could help consumers who are trying to establish their credit for the first time or repair damage from financial distress. Fair Isaac Corporation (FICO), Experian and API provider Finicity will debut the UltraFICO™ Score pilot program early next year and widespread availability is expected by mid-2019. The new credit scoring method requires consumers to grant permission to gather information from banking statements, including the length of time accounts have been open, frequency of activity, and evidence of saving.

FLOURISHING FAKES?

For the second time this year, Fannie Mae has issued a warning to lenders to help them identify an increasing number of companies that appear to be fake being used on mortgage applications. So far this year, Fannie Mae has identified 40 companies alleged to be spread throughout California, including the Los Angeles and Silicon Valley areas.

Sources: Fannie Mae, Freddie Mac, Fair Isaac Corporation, Experian, Finicity

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.

 

Household bliss, validating values & economic indicators

HAPPY HOMEOWNERS

A whopping 83% of homeowners say they love their home according to the 2018 Consumer Housing Trends Report from the Zillow Group. Additionally, 64% describe their homes as a financial investment, while 36% say they “see their home more as a reflection of their identity.” This year’s survey was conducted among 3,116 homeowners between April 25 and June 10.

CONTINUING CLIMB

The rate for a 30-year fixed rate mortgage reached its highest point since April 2011 according to the Freddie Mac Primary Mortgage Market Survey. The survey began tracking rates in 1971, and notes that while rising prices and rates are quelling demand, “the monthly payment remains affordable due to the still low mortgage rate environment.”

VALID VALUES?

Miami is the most overvalued real estate market in the U.S. according to the latest CoreLogic HPI Forecast Validation Report. The Irvine, California-based property data provider lists Austin, TX in the number two spot and Fort Myers, FL came in third. On the other end of the scale, Connecticut has the top two most undervalued real estate markets nationwide – Bridgeport and Hartford, with Detroit, MI at number three.

RECESSION PREDICTIONS

Economist Elliot Eisenberg analyzed all recessions in the seven largest democracies since 1960 and found the following: Monetary policy was to blame 26% of the time, bursting of a credit bubble was the next largest cause at 17%, oil price shock or the bursting of a housing bubble were next at 12% each, and banking crises were the cause in 10%. Eisenberg predicts that monetary policy will bring on the next U.S. economic slowdown, but notes, “Good times lead to overly optimistic forecasts and loosening of credit standards, which leads to risk mispricing and increasingly risky financial behavior, which sets the stage for the next recession.”

*The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.